Euro row widens cabinet split

Chancellror Gordon Brown is blowing cool on the euro

By BBC News Online's political correspondent Nick Assinder.

Just as Tony Blair hoped to fight back after one of his worst weeks in office, there are growing signs that the cabinet split over the euro is widening.

It is claimed that Chancellor Gordon Brown is being left out on a limb as a group of pro-euro ministers step up their campaign for Britain's early entry into the single currency.

It is even suggested that Mr Blair is himself encouraging the ministers - Peter Mandelson, Stephen Byers and Robin Cook - to whip up a debate about the euro in the run up to the next election.

Meanwhile, Mr Brown is expected to continue blowing cool on the single currency in his keynote Mansion House speech later this week.

He is said to want Labour to keep quiet about the issue for fear it will play badly in the looming general election campaign.

Now union boss Sir Ken Jackson has joined the fray, accusing Mr Brown of "ducking" the issue, and urging the government to "get off the fence" and make its position clear.

William Hague's campaign taking the lead

There is certainly a widespread feeling in Westminster that anti-euro MPs on both sides of the Commons have been making all the running.

And it is claimed Mr Blair wants to start a fightback on the issue in an attempt to win public support for the euro before the next election so Britain doesn't miss the boat.

Early vote

He fears if the "no" lobby is allowed to campaign unchallenged, it will be hugely difficult to win voters over to the euro in time for a referendum on British entry early in the next parliament.

The prime minister is known to support entry into the euro, so long as the economic criteria are met.

And latest surveys suggest that the British economy is now starting to converge with other EU economies, which would make entry soon after the election possible.

But, unless the pro-euro argument has been won by then, entry could be severely delayed while the government gets out on the stump, persuading people of the benefits of joining.

The last thing the prime minister would want would be to hold a referendum and have membership rejected.

There is a strong feeling amongst many in Westminster that a concerted campaign now would succeed in turning the current anti-euro tide in time for a swift referendum.

Off the leash

The danger for the prime minister, however, is that by encouraging a high-level debate he may actually fuel reports of a cabinet split.

It has already been claimed that Mr Byers was ordered by the prime minister to tone down his pro-euro remarks after he allegedly went over the top and infuriated the Chancellor by claiming there would be 3m job losses if Britain refused to join.

The risk for Mr Blair is that, if he lets his pro-euro ministers off the leash he may find they occasionally overstep the mark and land him with more unfavourable headlines.

Things are little better for William Hague, of course. He has a senior, if currently marginalised, pro-euro group, led by former Chancellor Ken Clarke, on his own backbenches.

At the same time he is under pressure from some to harden his "not yet" position and rule out ever joining the single currency.

But, for the moment, it is his "save the pound" campaign that is attracting public support - much to Mr Blair's irritation.